Archive for February 2011

One factor that greatly erodes confidence in the $5.5 billion O’ahu rail project is the annual attempt of the Legislature to raid funds from the half-cent excise tax enacted by the city to pay for the train.

This year, senators are proposing to “borrow” $200 million from the rail fund to enable them to balance the state’s budget while ducking the tough decisions to get their own financial house in order.

The state is already skimming 10 percent off the top of the transit tax — potentially $400 million over the life of the tax — to pay for nonexistent “administrative costs.” This unnecessarily runs up the cost to O’ahu taxpayers for Hawai‘i’s most expensive public works project by 10 percent right off the bat.

In Mayor Peter Carlisle’s first appearance before the Legislature, he wimpishly let Maui Sen. J. Kalani English extract a promise from him not to try to get the 10 percent back.

It’s no wonder English is so protective of the state’s share of the transit levy; it essentially forces O’ahu taxpayers to subsidize his Maui constituents by paying a 4.5 percent excise tax for some state services while neighbor islanders pay only 4 percent.

The concern is that instead of tightly watching expenses on this enormously costly project to keep it from growing out of control, it’s being treated by lawmakers like a giant slush fund that could turn into the biggest orgy of profiteering Hawai‘i has ever seen.

There is no longer any reasonable doubt that the combination of the city’s excise tax plus whatever federal share emerges from a cost-cutting Congress won’t be enough to build the 20-mile commuter line, much less cover the operating costs.

That city leaders refuse to say how they’ll make up the difference — and that the Legislature and Abercrombie administration shamelessly skim instead of holding the city’s feet to the fire — should make us all very nervous.

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Is anybody else starting to feel that Gov. Neil Abercrombie is getting a little wiggly on raising the general excise tax, which he promised not to do in his campaign for governor?

On the KITV4 morning show Monday, Abercrombie wouldn’t rule out a GET increase because of unfunded pension liabilities that are threatening the state’s bonding authority. The pension problem was well-known when he made his campaign promise.

Then yesterday, Abercrombie’s spokeswoman Donalyn Dela Cruz told the Star-Advertiser’s Political Radar that the governor doesn’t support a GET increase and didn’t propose one in his legislative plan, but added, “If a measure to raise the GET passes out of the Legislature because other elements of his plan are not adopted, he will of course consider it as the people’s will.”

Looks to me like a big wink to legislators that if they pass a GET increase, he won’t veto it.

It’s interesting that he’d consider what the Legislature might want to be the “people’s will” ahead of the clear will of the people who elected him on a promise of no GET increase; according to the recent OmniTrak People’s Pulse survey that Dela Cruz was commenting on, 68 percent of the public opposes an excise tax increase.

The General Excise Tax will not be raised. Given the public’s lost confidence in government, no reasonable argument can be made to raise the GET. Government will have to make better use of the revenues that it has and grow the economy if more revenues are needed.

In a September candidate forum with Mufi Hannemann, Abercrombie said, “I’m against raising the GET tax without equivocation.”

The governor reiterated his opposition to a GET increase in December, leading House Speaker Calvin Say to declare, “The general excise tax, which is so regressive, is off the table. It’s a Christmas gift to all the general public.”

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Mayor Peter Carlisle has a message on his campaign website promising supporters that “steps are … being taken to remove the specter of politics from Honolulu Hale.”

Then on the same page, he’s soliciting individual donations of $100 to $1,000 and selling tables for up to $8,000 for a Mayoral Celebration on April 19 at the Hilton Hawaiian Village to raise funds for his future political ambitions.

The campaign fundraiser, originally scheduled for Valentine’s Day, is being held in lieu of the less political inaugural ball traditionally thrown by new mayors.

Carlisle promises big-name entertainment headlined by Jim Nabors, Jimmy Borges and Monica Mancini, and those who plunk down $8,000 for “platinum” tables get their picture taken with the mayor.

It’s a new day from his time as city prosecutor when he made a big deal of placing limits on the campaign contributions he’d accept.

Carlisle, who was elected in a September special election to finish Mufi Hannemann’s term, has already announced his intention to seek not one, but two more terms as Honolulu mayor “if my family and the citizens of Honolulu permit.”

The new mayor has split with one of his most prominent campaign supporters, former Gov. Ben Cayetano, who said at a recent anti-rail news conference that Carlisle is not a reasonable man and indicated he regrets backing him.

But interestingly, Cayetano’s wife Vicky is still listed as a member of the event committee for the April fundraiser.

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Here’s hoping the starry eyes of our state legislators won’t prevent them from taking a hard look at the numbers before giving their blessing to a proposal for fat tax breaks to attract movie studios to Hawaii.

Relativity Media and partner Shangri-La have promised to build film studios on O‘ahu and Maui if they get tax incentives that would cost the state an estimated $46.3 million a year. Promoters say it could result in 20 movies a year being filmed in Hawaii.

To sell the idea, they enlisted written testimony from former President Bill Clinton as well as in-person appearances by prominent film stars, and threw a private Valentine’s Day party for lawmakers at a posh hotel.

It’s difficult to evaluate whether it’s a good idea or not based on the information we have, but it’s of concern that the proposal came in late and is sketchy in its details as to the economic benefits Hawai‘i would receive in exchange for the tax credits.

Relativity CEO Ryan Kavanaugh says it’s cost-prohibitive to film in Hawai‘i under the existing tax structure, but we have two TV series currently filming here and a bunch of recent movies.

Legislators in both houses were wise to delay decision-making until they get more information on how much new economic activity we can expect, how many jobs will be created and whether they’ll be quality permanent jobs for local residents or temporary positions that involve a lot of people flying in from the mainland.

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The proposal by Gov. Neil Abercrombie and legislators to raise car registration and weight fees by an average of $50 per vehicle is a case study of why people are so cynical about the state’s gyrations to balance an $800 million budget deficit.

Lawmakers say they must raise vehicle fees because the state needs $86 million a year to finance road repairs and there’s only $17 million left in the highway fund to pay for the work.

The choice to taxpayers, they say, is to pay the higher fees or live with Hawaii’s disgracefully potholed roads.

The fallacy in that is, we’ve already paid to fix the roads.

Existing fees have produced plenty enough to keep our roads in good repair, with the fund over $100 million at times. It’s currently light and the roads unfixed only because the Legislature siphoned $145 million from the repair fund to pay for non-highway projects.

The current move to raise vehicle fees carries no guarantee that the Legislature won’t rob the repair fund again once it’s replenished, leaving us right back where we started.

These backdoor tax increases sting, and it’s a sucker bet for taxpayers to quietly accept higher vehicle fees without demanding assurances that lawmakers will discipline themselves and manage the money honestly for its intended purpose.

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The website by former city IT employee and ad man Keith Rollman made news during last year’s governor’s race when the Mufi Hannemann campaign had to disown it for its over-the-top ridicule of Neil Abercrombie and ask Rollman to take it down.

Now he’s relaunched it as a general-interest humor blog covering local and national topics — and his recent items on the toy gun ban, the hoary bat resolution and the City Council’s attempt to censure Rush Limbaugh were pretty funny.

Rollman has technical and artistic talents and he puts together a slick package of original cartoons, funny pictures and Onion-like sendoffs combined with links to canned material from The Onion and About.com.

If he keeps it light and spreads out the barbs, it’ll find a following among those who like their political commentary pointed.